The paper presents the latest statistics on exports of goods and services, and considers how they have grown over the past five years in both value and volume terms. Trends in exports to various countries are then explored - to major trading partners, as well as those to which exports are growing quickly and to those which are slow-growing or declining. Commentary then turns to trends in Australia's major export commodities and those commodities which are growing more rapidly.

LATEST EXPORTS DATA

1. Detailed exports data are released by the ABS about four weeks after the end of the relevant month, and quarterly data are released about two months after the relevant quarter. The latest quarterly figures, on a balance of payments basis, for the June quarter 2001, show:

the surplus of goods exports over imports, at $2.2 billion for the quarter, was the largest on record;

services exports were valued at $7.3 billion compared with imports of $8.2 billion. This resulted in a service exports deficit of $0.9 billion; and

the surplus of goods and services exports (in seasonally adjusted volume terms) contributed 0.2 percentage points to the GDP growth in the June quarter 2001.

2. While the monthly data are subject to more irregular influences, the monthly graphs of exports over the past four years are instructive, particularly of recent growth patterns.

3. The monthly and quarterly data can be quite volatile and are affected by various seasonal influences. The more detailed data by commodity and country are not provided by the ABS in seasonally adjusted form. Accordingly, this presentation concentrates on annual data, particularly during the past five years, to highlight some of the longer-term trends and factors affecting Australia's export performance.

4. The latest available figures for the 2000-01 financial year show:

exports of goods and services were $153.1 billion, with a surplus over imports of goods and services of $707 million. This compares with a $14.4 billion deficit in 1999-2000;

there was a small surplus in goods trade of $146 million, with exports and imports of goods both worth, in round terms, $120 billion. This was the first financial year goods surplus since 1996-97; and

exports of services were $32.8 billion, leading to a services surplus of $561 million, significantly influenced by the Olympic Games.

TRENDS IN EXPORTS

Reference year for CVM is 1999-2000.

5. Over the last five years total goods and services exports, in current price terms, have grown by 55%, to reach a record high of $153 billion in 2000-01. Goods exports have grown by 58% and services exports by 43% over those five years. After the effects of price changes have been removed, the volume of exports of goods and services over that period grew by 37%. Goods exports in volume terms increased by 40% and services by 28%.

EXPORT MARKETS FOR GOODS

6. The top five Australian export destinations in 2000-01 were (in order), Japan, USA, Korea, New Zealand and China. Since 1995-96, the USA has moved from fourth to second position. These five countries accounted for almost half (49%) of Australia's exports at the beginning and end of the period, declining slightly in 1998-99 to 47% partly as a result of the Asian economic downturn. Exports to ASEAN and the EU together accounted for another 25% of Australia's exports last year.

7. Other highlights were:

in the past 12 months, exports to 18 of Australia's top 20 export destinations reached record highs. The exceptions were Indonesia and Hong Kong;

exports to Japan have risen by $7 billion in five years, despite Japan's slowing economic growth during that period. Increases have occurred in the quantity of most major exports as well as the value. Japan accounted for about 20% of Australia's exports last year;

exports to the USA have more the doubled in the past five years, having the greatest rate of growth (152%) among the top 10 export destinations. They accounted for 10% of Australia's exports last year. The growth has been driven by increases in a range of commodities but principally beef (recovering from a severe slump in the mid-1990s), crude petroleum and wine;

almost 40% of the rise in exports to ASEAN in the past five years was due to increased exports of crude and refined petroleum, particularly to Singapore. Of course there were also significant imports of crude from ASEAN too. There was also strong growth in exports of cotton, milk and cream products and non-ferrous metals; and

the UK and Italy were Australia's major export destinations within the European Union, together accounting for almost half the exports to that region. Exports to the Netherlands more than doubled (to $1.7 billion), and to Greece quadrupled (to $160 million) in the past five years. Major growth has come from exports of coal, wool and wine.

Rapidly growing export markets for goods

8. Australian exporters have developed a range of new markets in the last five years. In 2000-01, there were 60 countries to which Australian exports exceeded $100 million, with 24 of these countries exceeding $1 billion. New markets have been developed across many parts of the globe including the Middle East and Africa, as well as in the more traditional destinations in Asia, Europe and North America.

9. Examples of export growth since 1995-96 are:

a fivefold increase in exports to Saudi Arabia, most notably motor vehicles but including almost $1 billion in exports of other commodities in the past year. There was smaller but still significant growth in exports to the United Arab Emirates, Kuwait and Bahrain. Exports to these three countries totalled $1.6 billion in 2000-01 (up 126% in the past five years);

exports to Iraq up from $14 million to $734 million in five years, having been severely affected by UN trade sanctions in the mid 1990s. As a result of the trade sanctions, the main exports to Iraq were food and humanitarian items, particularly wheat;

new markets developed in Mozambique, Tanzania, Sudan and Kenya, with exports to each of these countries exceeding $100 million for the first time in 2000-01, although South Africa remains the major African export market for Australia, with exports valued at $1.3 billion in 2000-01;

exports to India rose by 30% last year, following a small slump in 1999-2000 (mainly due to reduced exports of coal and non-monetary gold). Exports grew by 76% over the last five years, due to a wide range of commodities including coal, copper ore, wool, cotton and dried legumes;

an almost fourfold increase in the past five years in exports to Mexico to over $350 million in 2000-01, mainly agricultural goods and coal; and

exports to Viet Nam continued to rise each year reaching $500 million in 2000-01, mainly food, aluminium and copper.

Slow growing or declining export markets for goods

10. Australian exports to some countries and regions have had relatively small increases and, in some cases, have declined in recent years. These include:

Papua New Guinea and the Solomon Islands, where exports have declined for four of the past five years. The major decline came from lower exports of refined petroleum and industrial machinery. Conversely, refined petroleum has been the major commodity contributing to increased exports to other Pacific nations such as Fiji and French Polynesia. Exports of most other commodities to this region have remained flat or declined in recent years;

exports to South America have increased only slightly, with increased exports to Brazil (up 40% in the past five years) being partly offset by a reduction in exports to Chile (down 15%) and Argentina (down 4%). Coal accounted for over 50% of exports to that region. Other exports mainly comprised machinery, motor vehicles and a range of other manufactured goods;

exports to Indonesia have only recently shown signs of recovering from the Asian economic downturn. While exports increased by 30% in 2000-01, they have not yet recovered to the levels achieved in 1996-97 ($3.3 billion in that year); and

11. The ABS takes longer to compile services data by counterparty country. The latest information is for 1999-2000 (though calendar year 2000 data will be released on 2 October).

12. The main countries to which we export services are (in order), USA, Japan, UK, New Zealand and Singapore. Together these accounted for over half (52%) of Australia's services exports in 1999-2000.

13. The largest growth in the four years to 1999-2000 was to China (up 74%), USA and UK (both up by just over 50%).

14. In the period between 1995-96 and 1999-2000, exports of services to Indonesia, Japan and Hong Kong all declined by between 7% and 14%. There has been minimal growth in exports to Malaysia (up 3%).

EXPORT COMMODITIES

15. There are a number of ways to aggregate goods exports to give meaningful pictures. The following are common:

(a) Rural/non-rural

Reference year for CVM is 1999-2000.

16. Metals, ores and minerals (including gold) accounted for 46% of goods exports in 2000-01, slightly higher than in 1995-96 (44%). Rural products such as meat, cereals and wool have comprised about 25% of Australia's exports of goods for the past five years. There have been rises in exports of both rural (particularly meat and cotton) and non-rural goods (particularly crude and refined petroleum, iron ore, aluminium and motor vehicles).

(b) Industry of Origin

17. Australia's goods exports may be analysed according to the industry with which they are primarily associated. In 2000-01, almost 60% of Australia's exports were of manufactured goods, declining slightly from 64% in 1995-96. Non-ferrous metals and meat products were the major components, accounting for over one third of manufactured goods exports, while exports of motor vehicles and parts also rose sharply. The mining industry's share of exports increased over the period from 22% to 27% following increased prices and exports of coal, crude petroleum and iron ore. Agriculture has remained relatively flat at around 10%.

(c) Stage of Transformation

Source: Dept of Foreign Affairs & Trade

18. Exports may also be viewed according to the degree of transformation, or manufacturing valued added, which the goods have undergone. Elaborately transformed manufactures (ETMs) are identified as finished goods. Over the last five years:

the major growth has been in exports of unprocessed primary products (up 65%) following a recovery in exports and prices of some ores and fuels. Exports of processed primary products (other than gold) also increased by over 60%. Gold exports were lower in 2000-01 than in 1995-96 (down 8%);

exports of simply transformed manufactures (STMs) increased by 58% due mainly to price increases for non-ferrous metals such as aluminium, copper and nickel; and

exports of ETMs increased by 41%.

Major goods exports

19. The top five export commodities in 2000-01 were all mineral and fuel based products, namely coal, crude petroleum, non-monetary gold, iron ore and aluminium. These five commodities accounted for 28% of Australia's exports in the last financial year compared with 27% of exports in 1995-96.

20. There has been a recovery in exports of Australia's major agricultural commodities of wheat, wool and beef, which all suffered downturns during the mid to late 1990s. Together these three commodities accounted for 10% of Australia's exports in 2000-01.

21. Major commodity exports that have shown the strongest growth since 1995-96 are:

crude petroleum (with the volume of exports rising by 55% and the value up almost 400%), and refined petroleum (volume up 12% and value up 100%) due to increased world oil prices and production, particularly in the past two years;

alumina (up 66%) and aluminium (up 74%) following a recovery in world prices. There was a modest increase in demand with the volume of sales rising for both alumina (up 15%) and aluminium (up 29%); and

meat and meat products, mainly beef (up 67%) and lamb (up 104%). Exports of both products rose following a recovery in demand and increased world prices. Beef comprises over 70% of total meat exports. Live animal exports have also risen (up 32% in five years, and up fourfold in ten years) mainly due to rises in exports of beef cattle (55% of total live animal exports in 2000-01) and horses.

Rapidly growing goods exports

22. While Australian exports continue to be dominated by agricultural and mineral raw materials, there has been a broadening in commodities exported in the past five years, particularly of manufactured goods. Sizeable markets have emerged in the following commodities:

exports of passenger motor vehicles and parts more than trebled to almost $4 billion in 2000-01. The number of vehicles exported climbed to over 129,000 in the last year with major markets in the Middle East and the USA. There were also substantial quantities of motor vehicle components exported to overseas car assembly plants, particularly in Korea and the USA;

alcoholic beverage exports, predominantly wine, have more than trebled since 1995-96 and are now worth almost $2 billion annually. While volumes rose by 55%, values increased by 240% in the past five years. Major export growth was to the UK and North America;

export sales of copper, nickel and zinc all rose substantially, particularly in the past two years. This followed substantial increases in metal prices which were depressed in the late 1990s. Total exports of those commodities were worth over $4 billion in 2000-01; and

exports of pharmaceuticals more than doubled to $1.8 billion. This includes products that were imported into Australia and further processed and packaged before being re-exported.

23. There has also been an increase in some smaller value exports during recent years. These exports are across a range of products, mainly agricultural and manufactured goods. Examples are:

several new markets for fertilisers have been developed in the past two years, including Viet Nam and Bangladesh. Total sales tripled last year over the previous year, to $134 million;

cheese exports to a range of countries have grown, e.g. sales of unripened cheeses to Japan rose from $1 million to $130 million in the past five years; over $300 million of processed cheese was exported to the Middle East last year; and exports of ripened cheese (e.g. Cheddar, Gouda and Parmesan) to Japan, Netherlands and Korea exceeded $700 million last year; and

exports of contact lenses, spectacles and their parts were valued at over $85 million last year, which is an increase of almost $20 million on the previous year. Growth has been 75% in the past five years.

Services exports

24. Total services exports rose by 43% in the past five years, with travel and transportation services accounting for over 70% of services exports in 2000-01. Major growth in services exports since 1995-96 has come from:

Travel services (up 36%) which increased by over $4 billion. This includes a 56% increase in education-related services, i.e. the fees and living costs of overseas students studying in Australia, which were worth $4 billion in 2000-01;

Computer and information services (up 250%), with the value exceeding $750 million in 2000-01: and

Communication services (up 70%) and Other business services (such as research & development and engineering) which rose by 82%.

25. There was a one-off rise in Personal, cultural and recreation services in 2000-01 due to the Olympic Games.

26. Slower growing services exports were:

Transportation services which increased by 24%, reflecting increased competition on air routes and a reduction in Australian shipping operations; and

Financial and insurance services (up 19%).

SUMMARY

27. Exports of goods and services have grown substantially over the past five years in both value terms (up 55%) and volume terms (up 37%). The greatest growth in exports occurred in the past 12 months (up 22% on 1999-2000) with exports reaching a record high of $153.1 billion. This led to a surplus over goods and services imports of $0.7 billion, compared with a $14.4 billion deficit in the previous year. This turnaround was driven by:

the sharp devaluation of the Australian dollar;

a rise in demand and prices of some of Australia's key commodity exports; and

the influence of the Olympic Games which provided a surge in services exports.

28. Exports to almost all of Australia's major trading partners reached record highs in 2000-01, reflecting buoyant world trading conditions. There has also been the emergence of important new markets in recent years, particularly in the Middle East and Africa, and well as in the more traditional markets of Asia, Europe and North America.

29. Although Australia's goods exports continue to be dominated by agricultural and mineral raw materials, exports of manufactured goods have become more prominent, particularly passenger motor vehicles and parts, reaching $4 billion in 2000-01.

30. Travel and transportation services dominated services exports, accounting for over 70% of service exports in 2000-01, with the major growth in travel services which reached over $15 billion in 2000-01.

KEY ISSUES TO BE AWARE OF WHEN USING EXPORT STATISTICS

a) Confidentiality

31. The data on some export commodities may be confidentialised to prevent the identification of the activities of individual exporters. Confidentiality is achieved by combining the sensitive information with data from other cells. In general, confidentiality restrictions do not affect the figures for total Australian trade, or total trade by partner country, but will affect the release of data at finer levels of commodity detail.

32. Confidentiality restrictions apply to a range of commodities but some of the more important are sugar, wheat, aluminium ores and concentrates, woodchips and liquefied natural gas. In 2000-01, approximately 4% of the value of Australia's merchandise exports was subject to a confidentiality restriction. An Information Paper on the confidential restrictions applied is available on the ABS web site.

b) Country attribution

33. When goods are exported from Australia the declared country of destination may in some cases be the country of discharge rather than the country of final destination. This occurs most commonly when the country of final destination is unknown to the exporter and the country of discharge has a port which provides transit services for its neighbours. Rotterdam, for example, is a major port of discharge for goods going to the countries in Europe. Care should be exercised when using the statistics for individual countries as there may be some overstatement, or understatement, of the true level of trade.

c) Australia's exports vs counterparty imports

34. Australia's reported exports to individual countries may not be the same as the partner country's reported imports from Australia. The discrepancy between the partner country statistics are mainly due to timing, valuation and methodological differences. For example, some countries report imports on a 'cost, insurance and freight' (c.i.f.) basis, whereas Australia reports exports on a 'free on board' (f.o.b.) basis; the value threshold requiring Customs documents may also be different - Australia requires export documents for goods with a value greater than $500, but for example the USA excludes all imports less than $US1,251. More details on ABS bilateral trade reconciliation studies are available on the ABS web site.

d) Trade in services provided offshore

35. The definition of exports of services used by the ABS is based on the concept of residency. The ABS records all service transactions between residents of Australia and residents of other countries. However, there is increasing interest in alternative definitions of services exports.

36. One area of interest is the "exports" of services by Australian-owned companies operating in other countries (these are residents of the other country, not Australia) - such statistics are called "Foreign-affiliates trade in services" (FATS). These services may be sold into the host country or exported from the host country, but in neither case are they counted as Australian production or exports (although the Australian ownership of the companies and the income earned by Australia are measured in international investment statistics). Nevertheless, the production and sale of these services is of interest from policy and industry points of view, and the ABS is developing ways to measure them.

Source material

ABS publications:

37. International merchandise trade statistics are compiled by the ABS on a monthly basis and are released in two publications:

40. These Concepts, Sources and Methods publications are available free on the ABS web site.

ABS Web site:

41. The ABS Web site contains summary data from the latest publications, information about the ABS, advice about upcoming releases, the ABS catalogue and Australia Now - a statistical profile.

ABS information consultants:

42. ABS information consultants can help access the full range of ABS information, including very detailed exports and imports data, either one-off or on subscription - ABS user-pays services can be tailored to individual needs, time frame and budget. Specialists are on hand to help with analytical or methodological advice. Contact them on 1300 135 070 or email to client.services@abs.gov.au.

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